Observations Huntsville, Alabama Residential Real Estate Market May 2008:
This is a small sample from our 100 page monthly report contact us to obtain a copy.
May total dollar sales in the Huntsville, Alabama area were $163,567,078, 18.3% higher than last month’s $138,293,340, and 20.2% below last year’s level; this is a nice bump up! See the two Charts here, click on them for a larger version, one shows the monthly sales sequentially and the second shows the same data with the months “stacked” so you can see the comparable months in diferennt years lined up. The Huntsville, Alabama area is still joining the rest of the country in experiencing a slowdown in sales as exemplified by the downward curve shown by the 12 month moving average of total dollar sales. It looks like the gross sales are settling into a range between the 2006 and 2005 levels. Based on the way we are seeing the sales levels elsewhere as well as this data I would expect this trend (sales between the 2006 and 2005 levels) to be the case for at least the next year or so. So this is what we think a bottom look like. That does not imply a recovery, simply a stop of the previous falling levels. We still expect to see prices come down in the very competitive (read slow) market. See more commentary on my blog at Http://Tbrander.wordpress.com.
We do see inventory build-up, now at the highest level of months of inventory for both new (9.6 months) and used houses (8.3 months) since 2005 in all price ranges with the situation being quite acute for higher priced houses for new and used houses over $300,000. We see fairly rapidly rising inventory levels of over a year. (Page E-1). Absolute numbers of active listing have been moderating slightly (more so for new than used) but against slower sales. There are 17% more houses active than in May of 2007 against the lower dollar sales cited above. Inventory continues to build in all price ranges and both new and used houses. Click on chart for larger version
This chart show absolute number of active listings (left scale) at month end, and the corresponding Absorption rate (right scale) , for new and used houses. Note the legend at the bottom of the chart.
The builders in the Huntsville area are not doing a good job of reacting to the market conditions and constraining supply. It is unusual to see months of supply for new houses exceeding used house months of supply. Consumers, sellers of existing houses are having a harder time as the supply increases. The absolute level of used houses for sale is at an all time record. The build up of existing housing supply will continue to impact the new housing market.
Total active listings decreased from 8,300 in April* to 8,232 in May a decrease of 68. (See Page E-3). There were 273 new house new listings (a decrease from 332 last month), while sales of new houses increased to 211 for the month from 173 in April. New houses new listings ran 1.3 times the rate of sales (Section B Page 1).
Active New listings decreased from 2,174 last month to 2,110 this month, a decrease of 64 (Page E-3).
Active Used listings decreased from 6,126 last month to 6,122 this month, a decrease of 4 (Page E-3).
Total unit sales improved from 838 in April to 941 in May an increase of 103 units.
New sales improved from 173 homes last month to 211 this month, a decrease of 38.
Used sales improved from 665 homes last month to 730 this month, an increase of 65 (Sect E Page 3).
This further illustrates the impact of the used inventory build up on the new housing market.
Absorption for new homes was 9.6 months of inventory in May vs. 9.7 last month. This is still an increase of .8 months over last year at this time, see Section E page 8. Absorption for used homes was 8.3 months of inventory in May vs. 8.0 last month. This is a deterioration of 2.6 months from last year’s level at this time see Section E pg 8.
Average Days on Market for sold houses for new houses was 142 days vs. 158 days last month, with used at 107 vs. 103 last month. (See Section A Page 18).
Average sales price for sold new homes was $255,127 vs. $249,321 last month. (Chart Sect A Page 2)
Average sales price for sold used homes was $147,274 vs. $137,540 last month. (Chart Sect A Page 2)
*All references to last month numbers are revised, to pick up late entries (made after our prior publication date) to the MLS system.